18 7 In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2016 to discontinue accounting for reacquired shares as treasury stock Instead, shares repurchased will be viewed as having been retired, reassuming the status of unissued shares As part of the change, treasury shares held were reclassified as retired stock At December 31, 2015, UMC's balance sheet reported the following shareholders' equity ($ in millions) Common stock, $1 par $ 240 Paid in capitalexcess of par 960 Retained earnings 1,032 Treasury stock (6 million shares at cost) (33 ) Total shareholders equity $ 2,199 Required a Identify the type of accounting change this decision represents This is a change in reporting entry change in accounting method change in accounting estimate change in accounting principle b Prepare the journal entry to effect the reclassification of treasury shares as retired shares (If no entry is required for a transaction event, select No journal entry required in the first account field Enter your answers in millions (i e , 10,000,000 should be entered as 10) )

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18-7; In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2016 to discontinue accounting for reacquired shares as

18-7; In keeping with a modernization of corporate statutes in its home state, UMC Corporation decided in 2016 to discontinue accounting for reacquired shares as treasury stock. Instead, shares repurchased will be viewed as having been retired, reassuming the status of unissued shares. As part of the change, treasury shares held were reclassified as retired stock. At December 31, 2015, UMC's balance sheet reported the following shareholders' equity:

	($ in millions)
Common stock, $1 par	$	240
Paid-in capitalexcess of par		960
Retained earnings		1,032
Treasury stock (6 million shares at cost)		(33	)

Total shareholders equity	$	2,199

Required:

a.	Identify the type of accounting change this decision represents.

This is a

change in reporting entry
change in accounting method
change in accounting estimate
change in accounting principle

b.	Prepare the journal entry to effect the reclassification of treasury shares as retired shares. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)